Egypt Valley gas well booming
MORRISTOWN – A Chesapeake Energy Utica Shale well in Harrison County yielded an average of 7.69 million cubic feet of natural gas per day during 2011, a number that seemed fairly high when reported earlier this year.
Now, however, Oklahoma City-based Gulfport Energy Corp. has more than doubled that amount with a peak production level of 20 million cubic feet of gas per day from a well drilled in the western Belmont County area commonly known as Egypt Valley. The well is in the name of Shugert. In addition to the dry methane portion of the natural gas stream, Gulfport officials said this well also produced a peak level of 2,002 barrels per day of natural gas liquids, which include ethane, propane, butane and pentane.
Though not as large as some other companies pursuing Belmont County’s gas reserves, such as Exxon Mobil, Hess Corp. and Chesapeake, Gulfport is a publicly traded company on the New York Stock Exchange. According to the Gulfport website, the company’s other operational areas include southern Louisiana, the Canadian oil sands, northern Thailand and Belize.
Many Belmont County residents who originally signed leases with Wishgard LLC or Tri-Star Energy have seen those contracts turned over to Gulfport, while Gulfport has also signed many county landowners to their own leases. Terms of the leases can range widely depending upon when they were signed and a multitude of other factors. However, some property owners have received at least as much as $5,900 per acre, with as much as 20 percent of the production royalties.
Gulfport officials anticipate they can pump gas and liquids from the Shugert well into a sales pipeline by early December. The pipeline network – under construction by the many pipeliners entering the area – is necessary to take the product to market. This means the pipe is necessary for property owners who signed leases to begin receiving their royalties.
Gulfport is drilling into the Utica and Point Pleasant formation, which has been described as the “organically rich lower formation of the Utica Shale.” A report from the Ohio Department of Natural Resources lists “Utica/Point Pleasant Shale Wells” for the entire state.
Gulfport is certainly not the first company to reach the Utica in Belmont County. In late 2010, a Consol Energy well near Barnesville produced 1.5 million cubic feet of gas during a 24-hour period from its 200-foot bed. However, Consol eventually turned this into an injection well for accepting briny wastewater from drilling and fracking operations.
As Denver-based MarkWest Energy continues building $500 million worth of natural gas processing capacity in Noble and Harrison counties, the company now has a deal to gather gas from Gulfport.
“We are very excited to support Gulfport in the development of their rich-gas acreage in the southern Utica shale,” said Frank Semple, chairman, president and chief executive officer of MarkWest.
“The construction of this extensive set of midstream facilities is the first step of our Utica development plan which will provide full service integrated services for our producer customers.”
Under the terms of the agreement, MarkWest will develop natural gas gathering infrastructure primarily in Harrison, Guernsey, and Belmont counties that is expected to come online this year. MarkWest will process the Gulfport gas at its Harrison County processing complex, while providing fractionation and marketing services at the Harrison County fractionator.
At a processing center, the ethane, butane, propane and pentane are removed from the methane stream. At the fractionator, the ethane, butane, propane and pentane will be separated from each other so that all products can go to market.